General Electric's diversified business operations and global influence

General Electric

Jack Watson

In 1878 Thomas Edison founded the Edison Electric Light Company which through mergers and acquisitions became General Electric (GE). The 19th and 20th centuries watched Edison's company grow into a massive multi-national company with branches reaching into a vast number of businesses. In the years since its formation GE has become a global leader in a number of fields beyond the power generation functions that Edison had pioneered. Industries as varied as aircraft engines and financial services have both become staples of income for the multi-faceted organization. With all of the success that GE has enjoyed it appears that the company is destined for a bright future and yet, there are significant issues that must be understood and managed for GE to be a bright star throughout the next two centuries.

GE's Current and Future Influence on the Industry

The footprint of any massive multi-national conglomeration is significant but GE's footprint seems to be magnified. From shaping the relations with labor unions to influencing the way in which governments interact with business, GE has created benchmarks and set precedent for many of the industries in which it operates. However, GE has not been limited to simply helping to establish policy. General Electric has been an active participant in Free Trade efforts that have made a significant impact on developing nations. The company has also been instrumental in helping to set standards for the environmental stewardship that multi-nationals must accept in the modern day global village.

The influence of GE on the future relations between business and government or between business and the environment will most likely continue in the same direction that GE has followed. It appears likely that GE will look to explore better and cheaper ways of manufacturing which will undoubtedly influence the labor markets in developed nations. However, with the strides the company will make to outsource low-skill jobs, it is clear that their efforts to increase the number of high-tech or high-skill jobs will continue concomitant to that effort.

GE's Key Technologies

Again, it is difficult to narrowly define the key technologies of a company with such broad business activities as GE but for the purpose of this paper it is helpful to identify three major technologies that promise burgeoning growth and significant change. Broadcasting equipment, jet propulsion and power generation equipment all possess the qualities of having a substantial influence and may help to shape the future. GE not only engages in broadcasting but has shown significant innovation in technology and delivery methods for broadcast transmissions. The jet propulsion work being done by GE is helping to redefine how travel takes place and what resources are required to make various journeys possible. But perhaps the most significant technology the company is responsible for relates to the generation of power. The world is facing a fossil fuel famine and GE's efforts may be the lynch-pin in bridging the way to the new method of power generation.

GE SWOT Analysis

Strengths

General Electric is replete with strengths. From market share domination to innovation to global relationships, GE has a significant repository of strengths which promise to help keep the company viable. Company leadership is keenly aware of the significance of the company's breadth and has instituted methods to evaluate business venture strengths rather than examining the company only as a whole unit. Each General Electric "business is rated in terms of two major dimensions, market attractiveness and business strength." (Kotler, 1994, p. 72) This acknowledgement of diversity is also a major strength.

Weaknesses

Every organization has some weaknesses and GE is no exception. Such a massive company necessarily invites redundancy, waste and inefficiency. Beyond those issues is the challenge of being nimble and quick to change to meet a growing need. Finally, the company engages in research that involves nuclear power development, jet fuel and chemicals which could cause the company environmental liabilities which could prove not just significant to wildlife but could damage the company's image.

Opportunities

The developing markets around the world provide a feast of opportunity for a company such as GE. Inexpensive labor and cheap land signal great opportunities for GE not just for the growth of the company but in terms of creating customers to whom the company can sell its products. GE's awareness and sensitivity toward global trends also provides opportunities to increase market share. "General Electric Company's extensive global mission provided the foundation for its GE Appliances (GEA) in Louisville, Kentucky, to grow in spite of the 1990-92 recession ... its expansion goals allowed for flexibility in examining the unique characteristics of individual foreign markets and tailoring strategies to fit them." (Pearce and Robinson, 1994, p. 36)

Threats

Strength in diversity can naturally expose General Electric to various threats. Because the diversity in the company is so broad it is difficult to be the industry leader in every area. Nimble and aggressive specialty companies could exploit that advantage. Another threat to the organization is the potential failure to create innovative products which harms the image of the company and impacts its standing in the market. Perhaps the most significant threat to the company is presented by its thirst for new acquisitions. A failed acquisition that costs a significant portion of the company's assets could prove disastrous. Time Warner discovered this with the AOL merger and such threats seem particularly ominous for GE.

Conclusion

General Electric's past years of success are definitely an indication that the company has the stamina and capability of remaining a global business leader for years to come. Business, however, always retains with it the probability of failure and the possibility for complete extinction. But the careful work done by previous management to assure continued success will be hard to undo through mismanagement let alone by neglect. Thus, the company seems poised to move throughout the 21st century much as it had in the previous century and with that movement it will perhaps help provide a future of innovation that will change the way the world lives and truly improve the quality of life for everyone.